Technology and consumer-focused stocks soared Thursday as Wall Street ended its most volatile quarter in more than two years with a broad-based rally.
Banks and industrial stocks also lifted the market and recent laggards such as Facebook and Boeing rose. Even so, the solid gains, which came at the end of a holiday-shortened week, couldn’t prevent the stock market’s first quarterly loss since the third quarter of 2015.
Local stocks in the first quarter
Six of the seven publicly traded companies headquartered in the Chattanooga area lost value in the first three months of 2018:› Covenant Transport rose by 3,8 percent to $29.83 per share› Miller Industries fell by 3.1 percent to $25 per share› Astec Industries fell by 5.7 percent to $55.18 per share› Unum Group fell by 12.9 percent to $47.61 per share› Mohawk Industries fell by 15.8 percent to $232.22 per share› CBL & Associates Properties fell 23 percent to $4.17 per share› Dixie Group fell by 29.6 percent to $2.75 per share
After two years of slow-and-steady growth, the market started 2018 with a roar. Then the market plunged in early February, marking its first 10 percent drop in two years, as investors worried the Federal Reserve would accelerate the pace of interest rate increases. In the weeks since, the market has remained volatile and trading has frequently turned choppy, with concerns over trade disputes a key factor.
At the end of a quarter that featured many dramatic swings – the market had 23 days where it closed up or down 1 percent or more – the Dow Jones industrials were down 2.5 percent while the S&P 500 was down 1.2 percent.
Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said the market’s first-quarter performance has tempered expectations for the rest of the year after the strong start in January.
“Volatility has ramped up, inflationary pressures are more prevalent, interest rates are on the cusp of change, so that presents a higher level of uncertainty and higher investor angst,” Sandven said.
Chris Hopkins, a vice president and portfolio manager for Barnett & Co. in Chattanooga, said the market was due for a correction this year.
“We had two years essentially without any down period and the longest single period without at least a 5 percent pullback in the history of the stock market,” Hopkins said. “Valuations were getting a little stretched and the value of the tax cuts had pretty much been factored into the market so there has been some profit taking and some adjustments that were made in the first quarter. I’m not overly concerned because we have been expecting this correction for a while and I think the economic fundamentals are still strong.”
On Thursday, the S&P 500 rose 35.87 points, or 1.4 percent, to 2,640.87. The Dow gained 254.69 points, or 1.1 percent, to 24,103.11. The Nasdaq added 114.22 points, or 1.6 percent, to 7,063.44 and closed the quarter with a gain of 2.3 percent.
Among the seven stock-traded companies headquartered in the Chattanooga area, only the trucking giant Covenant Transport gained in value in the first quarter of 2018. Shares in most local companies fell more than the broader index averages with a majority of the local firms dropping by double-digit amounts in the first three months of the year.
U.S. stock markets will be closed for the Good Friday holiday.